It’s that time again. The NBAA Convention is just around the corner. As we gear up to face our industry brethren this year, we have a lot on our minds. Of course the 800 lb. gorilla in the room is the overall state of the economy that is having an impact on our industry. Then we have all heard that two major manufacturers won’t be exhibiting on the convention floor, yet they will be present at the static display. We have also taken a hit in the press who continue to vilify our industry by calling business aircraft use a luxury of the corporate potentates rather than a useful tool for business. The difficulty of getting credit has been an issue for some buyers; although the banks do have money to lend, the lending process has changed. A lot of negative tremors have been shaking us out of our comfort zones. So let’s take a deep breath and try to be objective.
We are seeing some real reasons for optimism. JETNET, being the world leader in aviation market information, has been objectively tracking the jet and turbo prop market activity for 20 years, and more recently, helicopter market activity too. We can now report seeing the first “green shoots” of improving market indications. For the first time in a long time we saw a leveling off of aircraft coming onto the market. At the end of August 2009 we showed 17.442% of the jet aircraft fleet for sale, and 11.523% of the turbo-prop fleet. As of September 30, 2009 we are showing 17.105% of the jet fleet for sale, and 11.399% of the turbo-prop fleet. Although not a breathtaking decline in available used equipment, it is a positive indication. The other important number to look at is the total of full retail sales of pre-owned jets and turbo-props, which for the month of August 2009 was 192 units, then in September it rose to 210 units. This is a very significant number because sales have to improve in order to deplete the available inventory of used equipment. In addition average ask prices experienced a small increase of .8% from August to September.
What to do? In a recent survey that we conducted to take the pulse of the re-sale market, when we asked what the respondents have done to weather the economic downturn, 66% replied that they have reduced their overhead, and second to that, 39% reduced advertising expenditures. And unfortunately, 34% reported having to cut staff. Yet 19% added more products and services with 20% having increased their ad venues. The tactics used to weather the current market situation vary throughout the industry yet all are targeted to achieve long term survival. We at JETNET have invested in building infrastructure and developing new product and services.
The industry will recover. The need for aircraft and all the services attached to their sale and use will not disappear. The point is to make sure that you are poised to ride the recovery.